Limitations Act, 2002 Has Removed Court’s Discretion to Add Parties Outside of Limitation Period, Based on “Special Circumstances”

Update: This decision was reversed by the Court of Appeal on December 3, 2008.

Our thanks to Debra Rolph of LawPRO, who has notified us of a recent decision that did not find its way into CanLII (the Canadian Legal Information Institute). The case is St. Jean v. Cheung and is a follow-up to an earlier decision by the same judge (Mr. Justice John C. Murray) in the same lawsuit. In the previous ruling, Justice Murray held that an action on behalf of a mentally incompetent plaintiff was prescribed because the plaintiff’s litigation guardian had “discovered” the claim more than two years before the action had been commenced. At the end of that decision, Justice Murray said:

Since the plaintiffs did not argue the issues of prejudice and special circumstances, I do not have any basis to exercise discretion to add the New Defendants after the expiration of the limitation period. Given the seriousness and the importance of this decision for the plaintiffs and for the New Defendants, I am prepared to entertain further submissions from the plaintiff on whether the Court’s discretion to add the New Defendants as parties to the first action should be exercised.

The plaintiffs took up Justice Murray’s invitation and moved to add defendants on the basis of “special circumstances”. His Honour dismissed the motion. In the course of so doing, he held that s. 21(1) of the Limitations Act, 2002 has done away with the former discretion to add parties outside a limitation period, where “special circumstances” have been shown.

Unfortunately, because the decision is not yet available online, we are unable to provide a link to it. However, it has been reported on Westlaw’s eCarswell, as St. Jean (Litigation Guardian of) v. Cheung, 2007 WL 2748324 (Ont. S.C.J.), 2007 CarswellOnt 5891. The ruling was released on August 10, 2007.

The plaintiffs had commenced an action against a doctor and a hospital. They brought a second action (this one) against Dr. Cheung and other named and unnamed doctors, as well as North York General Hospital. In his previous decision, Justice Murray held that the second action was prescribed. In this motion, counsel for the plaintiffs sought to add the defendants in the second action as defendants in the first action. Justice Murray dismissed the motion.

Unlike many such cases in which this issue has arisen, Justice Murray immediately turned his attention to s. 21(1) of the Limitations Act, 2002. (Regular readers of our site will know that there have been a number of decisions since that Act came into force, which have assumed the continued existence of the “special circumstances” power and have not referred at all to s. 21(1).)

Section 21(1) reads as follows:

If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.

Because we have not provided a link to the decision, we have reproduced Justice Murray’s discussion of s. 21 in full:

That (prior to the enactment of the Limitations Act, 2002) the court had discretion in limited circumstances to provide relief from limitation periods is well established. See, for example, the decisions of the Court of Appeal in Deaville v. Boegeman (1984), 48 O.R. (2nd) 725 and of the Supreme Court of Canada in Basarsky v. Quinlan, [1972] S.C.R. 380. Section 21(1) of the Limitations Act, 2002 has changed the law in this respect. The language of s. 21(1) is mandatory. On its face, it removes from the court any discretion to add parties after the expiration of the limitation period. The mandatory nature of the section is confirmed by s. 29 (2) of the Interpretation Act which states as follows:

In the English version of an Act, the word “shall” shall be construed as imperative and the word “may” as permissive….

This conclusion is supported by the learned author, Mr. Graham Mew, who has written extensively on the law relating to limitation periods. In an article entitled “Limitations Act 2002: A huge reform of existing law”, [This article can be found on PracticePro, a website maintained by the Lawyers’ Professional Indemnity Co., LawPRO at] Mr. Mew outlines the implications of the Limitations Act, 2002 and states as follows with respect to s. 21(1):

The attempted addition of parties to an extant proceeding after a limitation period has expired is often the subject of motions before the courts. After the new Act [the 2002 Act] comes into force, it will no longer be possible to invoke “special circumstances” or to otherwise seek to add as the defendant a party against whom the limitation period for bringing that claim has expired (there is an exception for amendments to correct misnomer or misdescription of a party). The new Act does not, however, appear to preclude, in a proceeding commenced within time, attempts to add further claimants after the limitation period has expired.

Therefore, the discretion of the court to permit the addition of parties outside the limitation period has been removed by the Limitations Act, 2002 and for this reason the plaintiffs must fail on their motion to add the New Defendants as parties in the first action.

Although Justice Murray did not cite any authority for his conclusion, his reasoning echoes that of Mr. Justice George Smith in Meady v. Greyhound Canada Transportation Corp. Justice Smith also held that s. 21(1) has removed the “special circumstances” power. Our discussion of that case can be found here.

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